Global Mining plots an unlisted future

The $180 million listed investment company
Global Mining Investments
is looking to de-list from the Australian Securities Exchange after failing to narrow the discount between its share price and asset value.

GMI will ask investors to vote on a restructure, including de-listing the vehicle and transferring its portfolio of investments – which includes
Rio Tinto
,
BHP Billiton
and
Newcrest Mining
stocks – to an unlisted managed investment scheme.

In a statement to shareholders, GMI said its board members had been “concerned for some time about the company’s continuing share price discount to net tangible assets".

At the company’s half year results to December 2011, chairman
John Robinson
said GMI’s NTA before tax had hovered around 20 per cent.

The discount continued to affect the company despite GMI’s investment portfolio consistently outperforming its benchmark.

Investors will have the option of opting out after the restructure or staying invested.

“After the restructure, investors will be able to redeem their units in Global Mining Investments Trust at a value determined by reference to the net asset value of the trust – thereby effectively removing the discount to NTA which currently applies to the company’s shares," GMI said.

If it receives the green light from shareholders, GMI will approach the Tax Office and the stock exchange for regulatory approvals.

It expects to send restructure documents to shareholders in late July.

GMI’s decision comes after research by Bell Potter Securities showed listed investment companies were trading at an average pre-tax NTA discount of 15.2 per cent at the end of March – up from 14.1 per cent in December.

At large LICs, with market caps of more than $500 million, pre-tax NTA discounts contracted from 7.4 per cent to 5.7 per cent over the March quarter, but discounts on smaller LICs grew from 15.3 per cent to 15.8 per cent, the research noted.